Do Europeans Outsource Their Jobs to Asia Too?

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Calling customer support and getting through to someone in India is something of a running joke in the US and certainly not a surprise when it happens. Of course outsourcing jobs like customer support makes a lot of sense for businesses big and small alike – it prevents them from having to pay over the odds but ensures that customers will always be able to get through to someone (and provides a handy barrier to help filter sieve out the more inane complaints). The only problem is that often the quality of support suffers thanks to language barriers and the fact that the people you’re talking to are often based thousands of miles away and have never actually seen the laptop you’re now struggling to turn on…

The same is true for things ‘made in China’ – another punch line these days. Manufacturing for many American companies is handled overseas by countries like China where it can be done more quickly and cheaply and this allows them to keep their overheads low and their prices competitive. Of course this potentially also creates a dip in quality, but that’s a debatable matter. Really the bigger problem in both these situations is of course that outsourcing work means fewer jobs for locals – which is a highly controversial matter that many believe is hurting the economy. Of course what also hurts the economy is that those salaries are being exported too – but it’s important to note that this is usually only a very small percentage of the profit.

So what about our European cousins? Is outsourcing an issue over there as well? Or do European companies find their workers more locally? Is there anything we could learn from their way of doing things? Let’s take a look at some of the facts.

Outsourcing: ‘Quite Big in Europe’

Right off the bat it’s fair to say that yes, outsourcing is an issue in Europe and you’re just as likely to get through to an Indian help centre in England as you are in the US. This is slightly less true for countries like Germany and Bulgaria though, partly because there are fewer German or Bulgarian speakers in India. It’s worth noting too that call centre growth in India is actually slowing down – presumably as more and more companies are realising the bad associations people have with this kind of outsourcing and as more options become available. In general though, this is still something that happens, even if it is slightly less widespread. Manufacturing however is outsourced throughout much more of Europe, and you’re just as likely to find a national flag in England, Germany or the France made in China. Outsourcing to Asia in all industries is common in Europe in fact, but in most areas not quite as common as the US.

Outsourcing Within Europe

One more reason that outsourcing isn’t as common in Europe, other than the aforementioned language barrier, is the fact that a lot of companies are now outsourcing but within Europe. This is actually something that is more and more common throughout the world and there are a lot of benefits to outsourcing within Europe for countries both within Europe and elsewhere.

Outsourcing in Europe is a useful option first of all due to the reduced language barrier. More people in Europe speak English, while a German company will be more likely to find German speaking workers in Europe than in India.

Outsourcing within Europe will still cut basic costs – you can find cost effective options in many Eastern European countries that rival the savings offered in Eastern countries – but at the same time companies in Western Europe get to save further as they won’t have the same inter-continental flights to check on their operations, the same expensive calls, or the same prohibitive shipping costs. On top of that, Europeans outsourcing to other Europeans get to deal with countries following the same EU laws and regulations, working within similar time zones and with recognizable university degrees and qualifications (that said India has the lead in terms of IT and engineering graduates with pharmaceutical and electrical degrees being in best supply in China).

In short, there are many benefits for European companies that want to outsource their jobs to the rest of Europe, so there is slightly less impetus to outsource to Asia. Furthermore, with EU laws making immigration easy between European countries, many companies are able to find Eastern European workers in their own country happy to work for a lower wage. In the UK there has been a recent influx of Polish immigrants doing labour jobs for low wage which has caused some controversy.

Other Considerations

Something worth considering when it comes to outsourcing in Europe and the US alike is that it’s mostly large companies that outsource. This is worth noting as actually it’s the smaller organizations that create the most jobs (because there are more of them).

Another consideration is that outsourcing can actually be positive for the economy if it results in more affordable and more desirable products and services. Research has suggested that outsourcing can actually increase demands for the affected products in the country of origin, creating more jobs both locally and abroad. Meanwhile, the savings that consumers make on more cheaply manufactured products may result in more spending on other services – whether that means more meals out or more holidays. Either way this could also help to in fact fuel the economy and create jobs rather than having the opposite effect.

In other words then, as usual this is by no means a black and white issue. There are many considerations with regards to outsourcing and no easy answers, but what’s certain is that just as in the US, outsourcing is certainly an issue in Europe.